Tenderly Lianchuang: Dencun upgrade is not enough to expand Ethereum

Author: Tenderly Lianchuang Nebojsa Urosevic, CoinTelegraph; Compiler: Deng Tong, Golden Finance

ETH has its limitations. It was obvious from the start that existing technology was unable to handle the large number of transactions. With its increasing cross-domain use cases and importance to various industries, it is imperative to implement innovative solutions to expand the network. The Dencun upgrade scheduled for March 13th is a step in the right direction, but it is only a short-term solution and requires Sustainable long-term solution.

Finding a balance between scalability, security and decentralization has been a long-standing issue in the blockchain trilemma. However, multi-chain solutions with an emphasis on interoperability and security have the potential to help Ethereum realize its full potential.

Dencun is a temporary solution

The Dencun upgrade is designed to enhance the scalability of Ethereum. Currently Being implemented across testnets. While a bug delayed the upgrade of the Goerli testnet, deployments on Sepolia and Holesky went quite smoothly.

Dencun introduces the concept of proto-danksharding, aiming to reduce costs by using the "blob" format instead of calldata transaction cost. Data blobs will make transaction data temporarily available in a "compressed" format, significantly improving storage efficiency. They are more cost-effective than calldata, potentially reducing costs by 80 to 90 percent. Later full shard upgrades will use the same format. Overall, the Dencun upgrade will bring developers higher storage efficiency, lower gas fees, and a better overall experience, while making Rollups more cost-effective.

While the Dencun upgrade is a step in the right direction, it is not a permanent solution. The upgrade focuses on making data storage more efficient, which is certainly beneficial. But the long-term problem facing the Ethereum network is capacity. The future focus must be on expanding the capacity of the network to support the ever-increasing number of transactions being executed, and we do this through multi-chain solutions to this point.

The way forward

Multi-chain solutions, namely Rollup and AppChain, are the ideal mechanism to increase Ethereum capacity in the long term.

Application chains, also known as application-specific blockchains, are specialized blockchain networks with their own dedicated processing power and storage designed to A single application provides the service. They can be built on top of larger mainnets, such as Ethereum, or even Layer 2 chains. Transactions are offloaded from the mainnet and processed by the application chain. If widely used, Utility Chains can and will greatly increase Ethereum's capacity.

Rollup technology can be used to build application chains, but the difference is that it handles off-chain transactions. Transactions are executed off-chain and then "rollup" into a single transaction and fed to the mainnet. Rollups are generally less efficient than application chains because they generally rely more on the main chain for security than application chains. They are also less customizable than app chains, but they still offer some flexibility and are easier to deploy and manage.

While both are useful on their own, using Rollup and AppChain can achieve synergies, combining the transactional efficiency of Rollup with the flexibility and customization of AppChain. Developers can also benefit from scaling beyond Layer 1 networks into more scalable and versatile environments, allowing them to design and deploy blockchain applications that meet the needs of their user base while maintaining high levels of efficiency and safety.

By increasing capacity, throughput, reducing latency and improving resource management, multi-chain solutions enable networks to accommodate Greater transaction volumes while maintaining optimal performance.

Meeting the Challenge

To be fair, on the Ethereum network Implementing a multi-chain solution presents developers with a unique set of challenges that require careful consideration. One of the main obstacles is the complexity associated with managing interoperability between different chains, which requires a thorough understanding of cross-chain communication protocols and integration technologies . Ensuring consistent security measures across multiple chains is another challenge.

Overcoming these challenges requires a thorough understanding of the technical complexities involved and a commitment to creating an accessible and developer-friendly environment that promotes multi-chain solutions. Seamless integration and efficient utilization.

The future of Ethereum is exciting. Finance, identity, gaming, supply chain, healthcare, food supply and many other industries are benefiting from the web. But rapid growth also comes with growing pains.

Capacity is a growing concern for Ethereum. While the Dencun upgrade will help solve this problem by increasing efficiency, it's only a Band-Aid solution. In the long run, the best way is to increase capacity, which can be done through multi-chain solutions such as AppChain and Rollup.